As Foreclosures Hit All-Time High, Wall Street on Pace to Hand Out Record $140B in Employee Bonuses

Finance is supposed to exist for one purpose: to make the real economy work better. The fact that the DOW Jones has topped 10,000 and banks are doling out record employee compensations, while foreclosures are at record highs and unempoloyment is expected to top 10% is further proof that the real economy and the finance world have come unhinged.

How can the finance world make tons of money off of an economy in crisis?
By removing import legislation over the last decade that allows Wall Street & banks to grow like crazy, deliberately make bad loans with high interest, and to do it with other peoples' money. With that kind of a formula you are guaranteed to report record profits--not by creating anything of value, but by taking billions out of the real economy in trading profits.

"Deepest Global Recession Since the Great Depression"

The International Monetary Fund is forecasting the global economy will decline this year for the first time since the Second World War. On Wednesday, the IMF said the global economy would see a 1.3 percent decline in what it called “by far the deepest global recession since the Great Depression.”

(Quote taken from DemocracyNow!)

90 Million People Will Die as the Result of an Economic Collapse

The world is on the edge of a economic collapse because of the lack of integrity of a few in our businesses. "A new report from the Overseas Development Institute said the collapse of the global economy would cost 90 million lives, lead to an increase to nearly a billion in the number of people going hungry, and cost developing countries $750 billion in lost growth."

In a world where corporations are given the power to determine the fate of billions of lives, is it not only logical that this power be in the hands of the majority that work in these businesses and not in the hands of a few executives.

(Quote taken from DemocracyNow.org)

"...We Will See the Day When We Live on What We Produce" -- Marion G. Romney

Every year, Americans import $731.214 billion of goods more than they export. If foreign trade stopped, we would be forced to consume less than half of what we currently consume. This is the root cause of our current "economic" problems.

In order to buy almost 60 percent more than we produce, we have accepted loan after loan from foreigners. Currently 45 to 50 percent of our federal debt held by the public (the debt issued to fund annual, federal deficits) is owned by foreigners. 70 percent of all our new debt is being purchased by foreigners. This is the equivalent of mortgaging a cow to a stranger to buy more milk.

What is the solution to our problem? Stop mortgaging the American cow, and drink less milk. It appears that foreigners will force us to do just that. For the first time, foreigners are curbing their appetite for American IOUs, and soon, we will be forced to consume what we produce and pay down our $56 trillion mortgage for many years to come.

(Statistics taken from government websites and former U.S. Comptroller David Walker)

High-Engaged Workers Are 7 Times More Profitable Than Low-Engaged Workers

In 2006, Gallup estimated that disengaged employees cost the American economy $350 billion per year. A study done by Kenexa Research Institute found that of 4,000 worldwide companies, the top 25 engaged workplaces outperformed the 25 lowest engaged businesses 7-to-1--based on shareholder return, on a five-year basis.

If engaging employees is the driver of productivity, what can a company do to engage its workers? Kenexa Research Institute suggests that there are four main drivers that help create engagement in the workplace:

(1) "Leaders who inspire confidence in the future of the organization."
(2) "Managers who respect and recognize employees."
(3) "Employees are inspired and engaged by exciting work that they know how to do."
(4) "Employees are inspired by organizations that demonstrate genuine responsibility to two critical stakeholders groups: employees and communities."

It may seem counterintuitive that putting engagement above productivity leads to greater productivity until you realize that engagement is what creates productivity. Maybe the answer to our economic crisis is not to create more money, but to engage the American workforce.

(Information from http://www.kenexa.com/getattachment/8c36e336-3935-4406-8b7b-777f1afaa57d/The-Impact-of-Employee-Engagement.aspx)

How Do We Respond to the Current Economic Conditions?

Fast Company recently asked the author of Good to Great (7 million copies sold), Jim Collins, "What does your research suggest about the best way to respond to the current economic slowdown?"

He answered, "If I were running a company today, I would have one priority above all others: to acquire as many of the best people as I could. I'd put off everything else to fill my bus. Because things are going to come back. My flywheel is going to start to turn. And the single biggest constraint on the success of my organization is the ability to get and hang on to enough of the right people."

Is it safe to say, then, that the economy is in trouble because the largest corporations in the U.S. do not have the right people to make the right decisions? Why have many of the largest companies in America not been able to "hang on to enough of the right people"?

In an industry of nearly 100% turnover annually, the Container Store's turnover is 18% annually. Not only does the Container Store hang on to the right people, but, the Container Store has been on Fortune's list of The Best Companies to Work For since 2000; twice, the company has been number one. One employee boasts that she turned down a job at the World Bank to work for the Container Store. The Container Store is able to "get and hang on to enough of the right people" because they have created a democratic company.

A quick evaluation of all The Best Companies to Work For demonstrates that "the ability to get and hang on to the right people" is a matter of company structure and company culture. The current economic times are not the result of bad debt. They are the result of a rejection by the latest generation of workers in America and the result of many large companies' inability to "get and hang on to enough of the right people."

Democratic Business Can Save Our Economy

We are on the verge of the second worst (if not the worst) economic times in the history of our country. The best suited organizations to weather these times will be democratic organizations.

Suppose that Company A and Company B each have 3000 employees. Company A's citizens own 70% of the company. Company B is owned by the founder and two investment firms. Company A only has three layers of management and most of the company decisions are made by the citizens themselves. Company B has eight layers of management and the only time anyone knows about company decisions is when they read about them in the weekly memo.

What will happen when times become tough in the industry? Which company's citizens will take a voluntary pay cut? Which company will increase our nation's unemployment rate? Which company's citizens will work through the night for an entire month to make sure the company stays afloat? and Which company will survive?

You can be assured that many sacrifices will be required of American citizens during the coming years. A lot of us will be tested to our limits. If our businesses, communities, and country are important enough to us we will decide to endure. Our collective decisions will determine the future of our country.